Just What are the benefits of forex trading? | ForexGen

The are many benefits of forex trading when compared to other financial markets. One of the major advantages over all other markets is the low margin requirements.

Some modern retail brokers offer traders leverage of a whopping 500:1. This is a margin requirement of just 0.2%. This may sound very enticing when we think that we can open a $1,000,000 position for just $2,000. However, it is important to remember that leverage can work with you as well as against you. Leverage can amplify your trading gains as well as your losses.

Another huge benefit of the forex market is the fact that it is open 24 hours a day. Just as one financial center closes, another opens. More information about the trading times of different financial centers can be found on our trading hours page.

The Forex market is the most liquid of all the financial markets. The main of this is the fact it can result in some very low spreads (the difference between the buy and sell price), especially on the major currency pairs. For example I have seen spreads of lower than 1 pip on EUR/USD.

Due to the high liquidity of the forex marketplace, it makes it possible to trade a very wide range of forex trading strategies. Some of these include scalping strategies, news spike strategies, swing trading strategies, pseodo hedge type strategies, carry trade strategies and many more.

Another benefit of the currency market is the fact that as it trades currencies, and currencies all have a base interest rate, it opens the opportunity to buy a currency with a high interest rate, whilst selling a currency with a low interest rate. This enables the trader to profit from the difference in the interest rates. This is known as the carry trade.

In conclusion, the forex market has many advantages over the other financial markets and there is great potential to earn excellent returns on your investment. However, it is very important to remember that whilst leverage can improve your trading gains, it can also increase your trading losses.

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.